Want to see an end to budget deficits? Here are some facts you may not be aware of, and how they can be used to achieve a clear, simple, and doable end to the current dilemma.
First, you need to understand this: No business pays tax. Taxes are simply integrated into the cost of goods or services sold (COGS) as part of overhead, and passed on to the consumer.
Business taxes are a class-warfare con job perpetuated by liberals (Democrats and Rockefeller Republicans) to make people think “yeah, stick it to those evil businesses” when in reality it is those same consumers who are paying the tax, not the business.
The answer is a flat income tax rate with no exemptions. None. Nada. Zilch. You earn an income, you pay at the same rate as everyone else. To paraphrase Herman Cain, we are all pulling the wagon, not just a few pulling the wagon while everyone else rides.
Here are some numbers (FY 2009) that show how a flat rate income tax can work in both Federal and State:
US 2009 $12,015,534,968,000
GA 2009 $332,091,131,000 (2.76% of US)
US $3,100,000,000,000 (25% of US Personal Income)
GA $18,903,699,531 (5.7% of GA Personal income)
Thus, with a flat federal tax rate of 25% and a flat Georgia state tax rate of 6%, the budget deficits are eliminated, and business taxes go away, and prices drop since businesses no longer have the huge tax burden to pass on to you.
The only people who will not like that are 1) the freeloaders who don’t pay taxes now, and 2) the people who make money off the freeloaders not paying taxes.
You might ask, “Well, what about the Fair Tax?”
I am not against a consumption-only tax. In fact, I think, in theory, it is the best choice. However, implementing a flat rate consumption tax that is coupled with elimination of income tax, and minimizing the impact during transition, though possible, would take some serious work and require that political party interests and special interests be kept out of the design and implementation. That is a tall order, especially as gullible as many voters are when they go into a trance upon hearing the mantra “But its for the children.” Or “environment”. Or “my mortgage deduction”, or whatever phony excuse the piglets at the government sow’s teat come up with.
I figure that no one wins if we argue interminably about how to create a tax code the best way. Let’s take the steps we can. The first step for the right foot is a flat, non-progressive, no exemption, income tax replacing the current income tax scheme, and the first step for the left foot is to eliminate all spending that is not authorized by the Constitution.
If, after these steps, we can find a way, and the need, to implement a consumption-only tax, then do it. But, let’s at least quit drowning and get our heads above water – while we still can.